[toyotafanfan]

Chrysler Idles Plants Over Dispute With Plastech

http://money.cnn.com/news/newsfeeds/articles/djf500/200802041456DOWJONESDJONLINE000570_FORTUNE5.htm

DETROIT -(Dow Jones)- Chrysler LLC said Monday it idled four assembly plants and may close other production operations in the wake of a contract dispute with bankrupt parts maker Plastech Engineered Products Inc.
The auto maker is idling its Sterling Heights, Mich.; Newark, Del.; Toledo, Ohio and Belvidere, Ill. assembly plants affecting 10,500 workers, spokeswoman Michele Tinson said. Chrysler is seeking permission from a federal bankruptcy court to access its machines in Plastech plants that exclusively make Chrysler parts.
Plastech, which makes interior trim, underhood components, bumper and other exterior components and cockpit modules, filed for bankruptcy Friday after Chrysler, its fourth-largest customer, pulled the contracts and it couldn't get any financial aid from its remaining customers to avoid Chapter 11. As part of the filing, the court issued an automatic stay freezing all assets.
Chrysler had a plan in place to switch its orders to other suppliers such as Magna International Inc. (MGA), a person familiar with the situation said. Those plans were trumped by Plastech's filing, derailing a move that could been completed in the event of a production disruption, the person said. Auto makers contractually own many machines at supplier plants that build their exclusive parts and have the option of repossessing them at any time.

from automotive news:

Plastech bankruptcy could shut all of Chrysler


Plastech supplies Chrysler about 500 types of trim, such as door panels, floor consoles and engine covers. Losing those parts " will in turn halt the production of (Chrysler's) entire corporate fleet of vehicles, idle at least 14 plants and lay off associated workers for an undetermined amount of time," Chrysler said in the court documents.
The automaker is asking U.S. Bankruptcy Judge Phillip Shefferly to let Chrysler take immediate possession of its tooling in Plastech's plants. Plastech opposes the motion, saying its business assets are protected by bankruptcy law.
Chrysler tried to collect its tools Friday, prompting the Chapter 11 petition.

fan

 

[EvoFire]

Things can't get worse for Chrysler can it?

On a second thought, it might a good thing, no? Since everyone complains about the shitty plastic in Chryslers, isn't it a good time to move on to something a little better?

 

[CharmCityES]

i still say chrysler's days are numbered...ive said this since the beginning
im a toyotafanboy for sure, and i stick with my yotas, but ford and GM definitly have improving and competetive products as of now...they make good vehicles, and my stepmom currently has a 2008 ford taurus SEL company vehilce and its a damn good car...chrysler stands behind teh 8 ball still and thus i see them failing in every aspect, as their products have akward and odd styling not appealing to consumers

 

[EvoFire]

Well, they are doing a emergency restyle of the Sebring, Caliber and whatever, just a whole load of cars. We'll see whats up in a year. Their cars used to be nice. I liked their "cab forward" design, made the cars look a lot better than those that Ford and GM made in that era. Maybe they should rehire whoever they had back then to do the current cars.

 

[Sulu]

Sounds like a political ploy... Plastech to Chrysler: "You shut us down (by pulling your contracts with us) and we will shut you down". We may have to wait and see who blinks first, or who is forced to blink first. Chrysler, in their desperate attempt to cut costs may not have foreseen this happening.

 

[100$ GUY]

One nice car from chrysler: 09 dodge ram!

 

[Sulu]

Sounds like a political ploy... Plastech to Chrysler: "You shut us down (by pulling your contracts with us) and we will shut you down". We may have to wait and see who blinks first, or who is forced to blink first. Chrysler, in their desperate attempt to cut costs may not have foreseen this happening.

Perhaps Chrysler's missteps were inadvertent, due to inexperienced management...

Maybe Chrysler knows what it's doing with this - but the company is under a brand new purchasing chief who has not worked in the automobile industry before. Perhaps they were anticipating a response like this from Plastech, but it's most telling that none of Plastech's other major customers - GM, Ford, and tier 1 supplier Johnson Controls are reporting any parts shortages from the company. It's also telling that Chrysler spokesman Kevin Frazier would not comment on why Plastech stopped shipping parts to the company.

The vehicles above whose production is immediately affected by the bankruptcy, though not the strongest sellers in the world, actually are in relatively short supply in terms of days' supply (calculated by dividing the number of units in inventory by average daily sales). That fact hints that perhaps Chrysler didn't intentionally shoot itself in the foot production-wise and that its actions with Plastech were not intentional. However, if Chrysler's intent was to ensure a steady, reliable supply of parts, its actions last week certainly seemed to work counter to that objective.

Full article available at: http://www.autosavant.net/2008/02/plastech-bankruptcy-filing-idles.html

 

[Sulu]

Plastech Attorney Says Tentative Agreement Reached with Chrysler

...

On Monday, Judge Phillip Shefferly asked the parties to work out an agreement; if the Plastech attorney is correct, it could mean that production will resume soon at Chrysler's idled plants.

The question of whether Chrysler may remove its tooling from the Plastech factories to install it in other suppliers' facilities is still unresolved. Arguments on that question are scheduled for February 13. Chrysler argues that the tooling is its property and is needed for production of its vehicles, while Plastech says that it needs more time to make the transition.

...

Full article available at: http://www.autosavant.net/2008/02/plastech-attorney-says-tentative.html

 

[Jegan_V]

One nice car from chrysler: 09 dodge ram!

Why choose the Ram of all the Dodges? The Viper SRT-10 is really the only car interesting in the whole company. The moment that car is gone, I honestly couldn't care less about the entire company.

 

[JustAnotherAsian]

holy shit. that sucks balls for chrysler. talk about putting all your eggs in one basket!

toyota would be in quite a pickle if asain warner (sp?), denso, one of their plastics supplier, or vuteq went downhill. but on the other hand, toyota doubles-up (or triple) on major components- they have pioneer, panasonic, fujitsu to rely on for radio head units for the 5th-generation camry alone. if any of them went down (very unlikely anyways), toyota can get pioneer and panasonic to bump up capacity a bit.

 

[Sulu]

holy shit. that sucks balls for chrysler. talk about putting all your eggs in one basket!

toyota would be in quite a pickle if asain warner (sp?), denso, one of their plastics supplier, or vuteq went downhill. but on the other hand, toyota doubles-up (or triple) on major components- they have pioneer, panasonic, fujitsu to rely on for radio head units for the 5th-generation camry alone. if any of them went down (very unlikely anyways), toyota can get pioneer and panasonic to bump up capacity a bit.

I think that it is highly unlikely that Aisin Seiki (commonly known simply as Aisin) or DENSO would go under. They are both members of the Toyota Group, a network of companies with ties to Toyota; Toyota owns shares in all of these companies. They are more than just preferred suppliers, more like family. I don't know if Toyota owns shares of Panasonic, Fujitsu or Pioneer, but Toyota is in a joint venture with Panasonic to produce hybrid vehicle batteries. That is how business is done in Japan; the companies tend to do business with other companies in the family.

GM and supplier Delphi, and Ford and supplier Visteon used to be in similar relationships, when the manufacturer owned the supplier, and before Delphi and Visteon were spun off as independent companies.

 

[100$ GUY]

Why choose the Ram of all the Dodges? The Viper SRT-10 is really the only car interesting in the whole company. The moment that car is gone, I honestly couldn't care less about the entire company.

Hahaha, is just my opinion.! Why? Its the one that I first thought of it right away, probably because I liked the redesign and the info was fresh. Vipers....never ever care about them.

 

[JustAnotherAsian]

I think that it is highly unlikely that Aisin Seiki (commonly known simply as Aisin) or DENSO would go under. They are both members of the Toyota Group, a network of companies with ties to Toyota; Toyota owns shares in all of these companies. They are more than just preferred suppliers, more like family. I don't know if Toyota owns shares of Panasonic, Fujitsu or Pioneer, but Toyota is in a joint venture with Panasonic to produce hybrid vehicle batteries. That is how business is done in Japan; the companies tend to do business with other companies in the family.

GM and supplier Delphi, and Ford and supplier Visteon used to be in similar relationships, when the manufacturer owned the supplier, and before Delphi and Visteon were spun off as independent companies.

yeah. i forgot to mention that it would be a very unlikely situation. anything under the toyota keiretsu... you'd might as well call them a toyota company. aisin, aichi, nippon-denso, kanto, towa, and any other company with "toyota" or "toyoda" in its name is one giant clusterfuck of... well... toyota. one can't fail by itself.

as for fuji and daihatsu... it depends i think. daihatsu is directly controlled (like above) and toyota controls fuji heavy by shares.

 

[ryannel2003]

Chrysler has had a history of nearing complete shutdown when they introduce something that completely brings them back up to speed. It really started in the early 90's with the Intrepid/Concorde and the "Cab Forward" designs. Then in 2000 it was the PT Cruiser, which people were waiting for months to acquire and had dealers marking them up $1-3K. Then in '05 it was the 300, which is still a nice car. They also have the '09 Challenger coming out, and those are selling in limited quantity. I just can't see Chrysler going out of business just yet. They really just need to refresh their current line. The Sebring/Avenger is a horrible, cheap looking car that just can't compete. The Charger needs an interior refresh, and could use a nice change of styling. If they could re-invent the 300 the same way Cadillac did with the new CTS, they would have another hit on their hands. I have been impressed with some Chrysler vehicles, but the current crop just doesn't do it for me. Let's hope they have something totally off the wall in the works.

 

[ECHOKnight2000]

Chrysler has had a history of nearing complete shutdown when they introduce something that completely brings them back up to speed. It really started in the early 90's with the Intrepid/Concorde and the "Cab Forward" designs. Then in 2000 it was the PT Cruiser, which people were waiting for months to acquire and had dealers marking them up $1-3K. Then in '05 it was the 300, which is still a nice car. They also have the '09 Challenger coming out, and those are selling in limited quantity. I just can't see Chrysler going out of business just yet. They really just need to refresh their current line. The Sebring/Avenger is a horrible, cheap looking car that just can't compete. The Charger needs an interior refresh, and could use a nice change of styling. If they could re-invent the 300 the same way Cadillac did with the new CTS, they would have another hit on their hands. I have been impressed with some Chrysler vehicles, but the current crop just doesn't do it for me. Let's hope they have something totally off the wall in the works.

I agree with you. But the reports of such losses from last year as far as money its staggering! Obviously they keep on bleeding. I wonder what Jim Press will do now if Chrysler goes under...craw back to Yota or go to another American company. Chrysler has potential but I feel that was lost awhile ago, its just on its last legs. I feel for the workers. Even if this bleeding has been happening for awhile its still never good for the company despite it being the "smallest" domestic company. Who knows, maybe, just maybe they will surprise us. But trying to turn around and re-vamp your whole product line up that overlaps too much and is too SUV base costs so much $$$ and on top of that sales that are:thumbdown:disappoin. Then on top of that paying off workers for plant shut downs which in itself cost the company $$$. Then you have the "emergency" redesigns, and the announcements of cars not being produced anymore including ones that haven't been out that long like a year or two, that really takes a hit. It goes on an on.

 

[ryannel2003]

If Chrysler were to shut down, i wouldn't be upset one bit. The cars aren't well built, the powerplants and transmissions are nightmares , and the styling is on the ugly side. They really screwed up with the Jeep division. The new Liberty is fugly, the GC has probably the cheapest interior of any car I have personally ever been in (this includes many GM products as well), and the Commander is way to small to be a 7 passenger SUV. The latest "Camry killer" which was supposed to be the Avenger/Sebring has failed miserably, and I would say 60% or more (maybe less) are to fleet sales. They have had mild success with the Charger and 300, but sales for those cars have been falling by double digits for the last couple of quarters. People are fed up with the crappy quality they have been offering for the past decade. If Ford, or even the General can create a quality car, Chrysler has to be able to compete. The American auto makers have raised the bar much higher than previously set, and Chrysler still is not up to par yet. They are trying to compete against the old benchmarks set by GM and Ford, which were not good to begin with.

 

[100$ GUY]

Not everything is going bad for chrysler....

http://www.theautochannel.com/news/2008/02/07/076991.html

Total fleet sales were down 18%, the company said. It is working to reduce daily rental fleet sales. THIS is in USA.
Chrysler's bright spots for the month include increased sales (january 2008) of the Chrysler Aspen, Sebring, Jeep Liberty and Dodge Caliber.

 

[middleoroad]

This weekend is the Chryslers dealers meeting where Jim Press is going to announce which models will get axed.There are rumors elsewhere about a Ford-Chrysler merger.These days just about anything could happen.

 

[Sulu]

This weekend is the Chryslers dealers meeting where Jim Press is going to announce which models will get axed.There are rumors elsewhere about a Ford-Chrysler merger.These days just about anything could happen.

That is old news, and I thought that it had been effectively ruled out. The sell-off of Chrysler may come, but I don't think that will happen so soon. Remember that Chrysler has just been bought out by a private equity firm. Cerberus may eventually sell off Chrysler, but I doubt it will be so soon.

These private equity firms are in business to make good returns on investment, and they get into a business they know little or nothing about (like the car-manufacturing business), to make money, and unless they believe they can make money by buying and flipping the company (buying and then almost immediately selling it off again to someone else), they would not do it.

These equity companies make money from these businesses that they know little about in any of the following 2 ways:

1. Buying a poorly managed company, or a company nobody else wants, at fire-sale prices, hiring and putting in good managers to get the company going again, then once it is doing well and making money, selling off the company at a profit. They will likely NOT want to run the company for a lengthy period of time.
2. Buying a company nobody wants, in the belief that the various pieces can be sold off separately for more than what they bought the whole company for.

So, Cerberus has bought Chrysler, a company nobody else wanted, at a fire-sale price. They hired and brought in good managers (like Robert Nardelli and Jim Press). They now have two options: run the company well for a few, short years, raising the value of Chrysler, and then selling off to Ford, or Nissan-Renault, or someone else (I am merely speculating here, and using these companies as examples, not because I have any insider information); or breaking up the company into small pieces, like selling Jeep off to someone, and selling Chrysler-Dodge off to someone else, in the belief that selling the two pieces separately would earn more money than it was worth bundled together.

I think that since they have already hired good managers, that they will try to run the company for a few years, getting rid of product nobody wants (like the Chrysler Crossfire and Pacifica), fixing up what may be good product (like the Sebring and Avenger), and then selling off the company -- either as a whole or as separate pieces -- at a good profit once it is again a good car company. I don't think that Cerberus would flip the company now (remember, nobody else wanted it); if they could successfully flip the company now, so soon after buying it, that would likely mean that someone else wanted it a few months ago when they bought it. If someone else wanted Chrysler at that time, Mercedes would have sold it for more money, and likely not kept 20% either.

I think it is too soon to tell exactly what Cerberus will do, but I doubt that they will sell it off so quickly.